Mortgages & C-19

El Gato De Negocios

Hi all.

Just inquiring about the impact of C-19 and mortgages and if anyone has any recent experience. Basically we were all set to apply for a self build mortgage however we spoke to our existing lender (PTSB) today and they informed that they will not allow anyone drawdown where an employer is receiving the covid assistance payment.

My employer has not however my wife's has. I will point out that her salary has not been impacted in any way and she has received full payment as normal since the whole thing kicked off (she works in head office for a hospitality firm) however as they are a hospitality firm, naturally they have had to temporarily lay off the bulk of the direct hotel staff.

This leaves us in somewhat of a sticky situation as we are due to close the sale of our current property on the 1st of December (proposed buyer has signed the contract already) and move to a rental down the country while we build down there. Up to now we have only been dealing with PTSB as we have a tracker with them and they were allowing us to port over the remaining balance of the existing loan onto the proposed self build loan +1% then the balance at normal market rates. We would be content to walk away from the tracker if it meant we were able to get a loan.

Does anyone know of providers that are happy to allow those whose employers are in receipt of the payment draw down on a mortgage? Her employer is the largest hotel group in the country with 40+ hotels so there is zero chance of them going under but obviously, banks being banks and underwriters being underwriters there is alot of twitchiness about the whole thing.

TIA.

Jim2007

El Gato De Negocios wrote: »

Does anyone know of providers that are happy to allow those whose employers are in receipt of the payment draw down on a mortgage? Her employer is the largest hotel group in the country with 40+ hotels so there is zero chance of them going under but obviously, banks being banks and underwriters being underwriters there is alot of twitchiness about the whole thing.

Well we are very much in uncharted waters and the risks are much higher than you seem to think. The fact that a company is in receipt of such payment is an indication that a company is vulnerable, so it is not surprising that lenders take the attitude they do.

Hotel groups tend to be highly leveraged, 40+ hotels means a very highly leveraged business... Its estimated that the top five hotel groups lost about $25b and some are on the brink. So this will not bring comfort to a lender.

The answer every lender is going to want to know, is what happens if that salary evaporates, are you going to be able to meet your financial commitment to them? If you can’t satisfy that concern it will be challenging to find a lender.

El Gato De Negocios

Jim2007 wrote: »

Well we are very much in uncharted waters and the risks are much higher than you seem to think. The fact that a company is in receipt of such payment is an indication that a company is vulnerable, so it is not surprising that lenders take the attitude they do.

Hotel groups tend to be highly leveraged, 40+ hotels means a very highly leveraged business... Its estimated that the top five hotel groups lost about $25b and some are on the brink. So this will not bring comfort to a lender.

The answer every lender is going to want to know, is what happens if that salary evaporates, are you going to be able to meet your financial commitment to them? If you can’t satisfy that concern it will be challenging to find a lender.

Thanks for the response.

To answer your question, yes, in the unlikely event her job went tits up my salary alone would be sufficient to cover the mortgage for the amount we would be looking to borrow however we would not get approval for the amount we require based on my salary alone. He employer has cash in reserve in excess of €100m so while there is leverage, there is also alot of liquidity there too. Its effin maddening, we have over 60k savings, equity of approx 25k from the sale of this place, earn around 150k between us but we haven't a snowballs chance in hell of getting a loan of less than 350k in the current climate. I rang BOI directly earlier and also a mortgage broker and both reported the exact same thing ie if a company is in receipt then its no chance Lance.

Pain in the hole but what can you do.

LauraAaron

Hope I can give a bit of info on the topic
Myself and my husband won the bid for a house 18th July
28th July mortgage was approved
Signed contacts 2nd September
Draw down was to be October
Each week bank asked for extra paperwork incl husbands tax
Husband has been in employment through the entire pandemic
Donegal to go into lockdown so bank wouldn’t drawdown because if this
Then told bank wouldn’t draw down due to him being in hospitality
Advised from bank that only manufacturing industry will be taken into account right now
Husband changed jobs straight away (the owners of the hotel he works for also own a manufacturing company)
Then told he would need 8 weeks of payslips to be able to use this
Vendor pulling out tomorrow
Our case is as far at it can go with the loan department in Dublin we’ll have our answer tomorrow whether we can drawdown or we have to pull out to save our deposit (solicitor had clause put into all contracts that if drawdown didn’t happen due to COVID we’d be entitled to our deposit back)
It has been the most stressful process I have ever been through and I just pray they come back with a favourable decision tomorrow because I don’t thinks I could go through it all again x

Jim2007

El Gato De Negocios wrote: »

I rang BOI directly earlier and also a mortgage broker and both reported the exact same thing ie if a company is in receipt then its no chance Lance.

Pain in the hole but what can you do.

Well if they are not willing to work on a case by case basis and you can’t apply as an individual, I don’t think there is much you can do but wait it out.